STUDENT HOUSING OVERVIEW - GLOBAL

Student housing is a popular and an organized segment in UK, US & Australia owing to high
migratory student population
UK
2.3 mn total students 20.2 mn total students 1.4 mn total students
Germany
France
438,000 migrated 1,044,000 migrated 363,000 migrated US Netherlands
students (19%) students (5%) students (26%)
India

600,000 existing beds 2,900,000 existing beds 51,289 existing beds

95% occupancy 96% occupancy 90% occupancy Australia

UK US Australia

Top 3 Mature markets Growing markets

Indexed growth of students in top 2 mature and Both Australia and

150 growing markets Germany witness
increased growth, specially Singapore
US & UK
140 international students is the biggest investor
are the biggest
country in the segment
recipient countries
130
Domestic migration is
120 higher than international.
Declining levels Total global Supply levels
110 investment – $16.9 bn globally range from
in 2017 6% to 24%
100 Growth has become
stagnant now
90
2006-07 2007-08 2009-10 2011-12 2013-14 2015-16

Australia Germany US UK

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STUDENT HOUSING OVERVIEW - INDIA

The Higher Education sector Government has announced a

is growing rapidly in India with
an average annual rate of
18%
Top states in India
budget for education industry of
with the high potential for
INR 79,685 cr in 2017-18,
Student Housing
which is 9.9% increase from
2016-17

Total foreign students Domestic migration students in

enrolled in India in 2017-18 India in 2017-18 are 26.6 mn.
was 46,144 from 166 different Top 5 states account for 5 mn
countries migration population alone 1,101 4,465
66% 34%
180,000
420,000
Key Educational hubs in the four zones of India Rajasthan Uttar Pradesh
1,689 4,465
37%
27%
400,000 420,000
Tier 1: Delhi,
Gurgaon, Noida Gujarat Madhya Pradesh
Tier 2: Allahabad,
Lucknow, Kota, 4,306
Jaipur North 63% 654
600,000 Oversupply
Tier 1: Kolkata 450,000
West

Maharashtra
East

Tier 2: Darjeeling, Andhra 3,542

Sikkim Pradesh Oversupply
Tier 1: Mumbai, 1,100,000
Pune South 12,041
27%
Tier 2: Ahmedabad, Tamil Nadu Local Student enrolment
600,000
Indore Migrated Student population
Karnataka (Domestic + Foreign)
Tier 1: Bangalore,
Chennai, Foreign Student population
Hyderabad Existing number of beds
Tier 2: Salem, (College hostels + PGs)
Mysore
Unmet demand percentage

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EXISTING SCENARIO AND COMPARISONS

Campus hostels PG accommodation Shared flat accommodation Student housing format

Limited space availability Plenty of options available Plenty of options available Plenty of options are in existence & upcoming
Strict timings Flexible timings Very flexible Very flexible
Standard set of facilities Standard set of facilities Extra amenities provided like Gym, parking etc Excellent amenities provided – eg; laundry, indoor games
room, biometric access card, full-fledged kitchen etc

High security Inadequate security Limited security High security

Cost affordable More expensive than campus hostels Most expensive More expensive than hostels but affordable as compared to
other options
Same college community Different college community Same college or Mixed community Same college or Mixed community

Major presence: Upcoming presence:

Delhi-NCR, Bangalore, Chennai, Indore, Expected occupancy rate:
Hyderabad, Mumbai, Dehradun, Jaipur, 85-95%
Pune, Kota, Ahmedabad Lucknow

Categories of housing
available: Average area allocated per Vision: Existing operators
Basic student: will scale up by 100% in
Medium 150-180 sqft next 4-5 years
Premium

Expected revenue per Expected Capex per Expected yield rate:

student per annum: student : 15-18%
180,000 360,000

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PREVALENT OPERATING MODELS IN INDIA
Revenue Share
 B2C model
 Holds good in prime locations
where demand is higher
 Landlord and operator share the
returns and risk involved in the
facility
 Revenue sharing allows landlords
to take 30%-45% of revenue
generated every month
 If the furnishing is provided by
landlord then percentage share is
higher towards them or vice
versa
 This model ensures the complete
ownership of the building in the
hands of landlord
 Majorly used by operators who
are in the industry from last 2-3
years and have strong funding
 High level of advertising and
branding
Build-Operate-Own-Transfer
 B2B model
 Holds good for a large university
within campus or within 5 kms
from the campus – with a
commitment of minimum students
 Operator is primarily responsible
for planning, construction and
operation of the facility
 Long term agreement between
university and operator usually
ranges from 15 to 30 years
 High risk and high return model
 Not popular with student housing
operators
 Universities provide land area if
the facility is within campus
 Huge funding is required due to
large capital expenditure
 Medium level of advertising and
branding
Fixed Lease Management Contract
 B2C model  B2B model
 Holds good for inferior locations  University construct and develop
and old buildings up to the age of the facility within the campus or
10-15 years mostly in a radius of 1-2 km from
 Fixed amount per month is the campus
decided as per the market  Operator is responsible for
residential rental. Minimum operations and maintenance of
amount accounts to 60% of the the facility
market rental given to landlord,  Agreement between the two
irrespective of occupancy levels parties ranges from 2-5 years
 Lease is signed between  Standard facilities are provided in
operator and landlord for a accordance with the university
duration of 9-11 months with 1  High return and low risk
year security deposit and  Limited branding
escalation of 7-10% every year  Residential charges are being
 Most operators prefer this model collected by university and a
as it involves minimum capex share ranging from 60-70% is
from their end and suitable for being given to operator
new entry  Not popular as mostly large
 High level of advertising and universities either work on BOT
branding model or have their own
accommodation provisions
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KEY OPERATORS IN INDIA

Aarusha Zolo
Your Coho Ziffy
Homes Placio Stay
Space Homes

Category - Basic Category - Medium Category - Premium Category - Premium

Category - Premium Category - Premium
 1,200 beds
 10,000 beds
   Founded in 2016  1,200+ beds

4,300 beds 1,200 beds
 Founded in 2015 2,000 beds
   100% occupancy  Founded in 2015

Founded in 2007 Founded in 2017
 85-90% occupancy Founded in 2015
   INR 10,000-30,000 per  85% occupancy

85% occupancy 70% occupancy
 INR 6,000-8,000 per bed per month
80% occupancy
  INR 10,000-24,000 per bed per month  INR 9,000-13,000 per

INR 4,800-6,500 per
 Operates in Delhi NCR, bed per month
INR 6,000-8,000 per
bed per month bed per month
 Operates in Bangalore Mumbai, Pune,
bed per month
 Operates in Pune,  Operates in Noida & New Delhi Chandigarh, Jalandhar
 Operates in Delhi NCR
 Operates in Delhi NCR
Bangalore & Hyderabad  Vision 2020-8,500 beds  Vision 2020-50,000  Vision 2020-expand in
 Vision 2020-expansion
 Vision 2020-expansion
 Vision 2020-Mumbai, in Delhi-NCR, 1000 beds & expand in Jaipur, Bangalore,
in Mumbai, Bangalore,
Pune, Hyderabad,
in Mumbai, Bangalore,
Delhi NCR beds in Indore & 500 Mumbai Indore & Kota Hyderabad
Chennai

beds in Lucknow
 Fixed lease, Revenue  Fixed lease, revenue 
Fixed lease model
 Management contract share and space sharing and
 Revenue share model
Fixed lease model
 Funding received: $1 model aggregator model management contract  Funding received:
 Funding received: $4.3
mn mn
 Funding received: $2  Funding received: $5.2 for 5-12 years undisclosed
mn mn  Funding received: $1
mn

Key
Flexibility
Location Community Low risk Text
Amenities Mixed culture Customization
Less
Organized
Differentiators advantage Experience factor restrictions

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COST PARAMETERS AND FUTURE POTENTIAL
Why Student Housing?
• Borne by landlord

Land cost
• Construction cost also taken by landlord  Increased demand – Corporate higher educational
institutions are expected to build over 10 million sqft of space in
the next 2-3 years indicating the increasing student intake and
• Usually borne by service provider subsequent need for student accommodation.
• If furnished already, refurbishment is done by service provider
• Revenue share is according to the capex distribution between landlord and service provider, usually the ratio is As per 12th plan document, Gross Enrolment Ratio is also being
Furnishing
cost
70:30; 60:40; 55:45 targeted to be 30% by government from 25.2%.
 High commercial yield – With high potential demand and
• Borne by service provider limited supply, student housing segment enjoys better
• Includes salary of housekeeping staff (cleaning, cook, warden, security), grocery bills, amenities arrangement –
gym equipment, games (indoor & outdoor), electricity charges commercial yield as compared to other real estate asset
Operating • Food expenses, laundry, maintenance cost, internet charges, water charges – levied as a cost on each student, segments. Returns ranging from 15-18% are expected in this
expenses inclusive of rental charges
segment by service providers.
 No restrictions – Currently, with the lack of regulations and
• Security equipment like CCTV, biometric sensor, smoke detectors etc
• Power back up guidelines for this segment by government authorities, there is
Misc • Books, decorative things, special occasion expenses (special food + decoration), documentation, marketing & lot of scope for the service providers to experiment with the
branding
Expenses concept and set the benchmarks
 Spending propensity – High per capita income has
increased 8.6% in 2018 from last year. This will ensure high
willingness of parents to spend on their children’s comfort and
convenience, as indirectly they are the target segment for
student housing operators
 Better than alternatives – Flexible timings, focus on
creating a sense of community and a second home, quality
meals and better infrastructure – these features inadvertently
favor student housing facility than other accommodation options

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